Are Classified Ads Coming to Your Facebook News Feed? [UPDATED]

Facebook may be working on a new ad product that will put the company in direct competition with sites like Craigslist and LinkedIn. According to a report from The Daily, Facebook has fast-tracked a new classified ads service that will allow users to populate their friends' news feeds with postings for a variety of goods and services.

The report cites two anonymous sources inside Facebook, who independently confirmed that the new classified ads feature is currently in development. Apparently, it's being called "Marketplace" (for now). Sound familiar? If you remember the term "Facebook Marketplace," you're probably in the minority. Facebook previously launched a classified service a few years ago called "Marketplace," but it is infrequently used. You can access the service here, as it's now called the "Oodle Marketplace."

The new Marketplace product would be much different that the old Marketplace product, as it would rely on social sharing and news feed placement. According to the report, users would be able to create their own mini-classified ads and promote them in their friends' news feeds. This could mean anything from goods for sale to job offerings to apartment rentals. The sources claim that users would have to pay a small fee ($5 or so) for a goods for sale post, but classifieds like "roommate needed" would be free.

Of course, having these classifieds pop up in news feeds instead of only accesible via an app would boost their visibility and could possibly turn Facebook into a big player in this arena. These new classifieds would obviously cut into Craigslist's market share, and possibly LinkedIn's slice of the job postings pie.

If you're thinking "Hey, Facebook already lets me pay to promote posts." you'd be correct. Facebook opened up their Promoted Posts product to users in early October. As long as you have less than 5,000 friends, you can pay to promote any of your status updates, photo uploads, or events in the hopes that more of your friends will see them.

So how would classifieds be any different? Apparently, they would have a slightly different look and could possibly allow for post-specific enhancements, like multiple photo view for products or rentals.

UPDATE: A Facebook spokesperson tells me that "Facebook is not working on a product like the one [I] describe."